I was wondering what the Islamic position was on loans. I thought the Quran prohibited usury but not the legal charging of interest.

I started thinking about this because of today's Reuter's article that says the US Congress is considering rules that will allow a borrower to sue a lender that does not verify certain loan qualification information such as employment history. Specifically this is legislation proposed by none other than Barney Frank, one of the precipitators of the present day home foreclosure problem. I find in fascinating that Congress is proposing rewarding the borrower that lies to the lender.

There is no such thing as a perfect law. Opposing interests intersect, compromises are made, and the end result almost always never pleases everybody. Lenders violating any provision of the Dodd-Frank Act will not be criminally liable. Violating any of the new provisions are just civil offenses. The Dodd-Frank Act is nothing like the New Deal that protected depositors, borrowers, and investors between 1933 and 2000. Even with the short comings, the mortgage reform provisions within Title XIV of the Dodd-Frank Act are good first steps towards ensuring higher standards within the lending industry, promoting financial stability, and aiding in consumer protection.

The usury is an obsolete term for interest! They call it interest and than it becomes usurous in some state laws when people don't pay on time! The test of a true Islamic state would be the absence of interest; promotion of education, business enterprise and employment of the all able bodied...

There are dire warnings about the interest based societies who borrow and spend to their destruction and misery!

What else is new? There is no more free lunches, you want desserts too...What is so special about the moochers who want free houses? They are the ones who main agents of the current mess who helped the banksters; it takes two to tango

Brilliant idea, a foreclosure moretorium. All those people that are owed the house they are in won't have to make payments at all now. Someone tell me why a bank would wish to participate in this market given the idiocy that passes for legislation in Washington these days.

What else is new? There is no more free lunches, you want desserts too...What is so special about the moochers who want free houses? They are the ones who main agents of the current mess who helped the banksters; it takes two to tango

It is a complicated issue. The banks made loans they shouldn't have made. Many people were buying homes with the idea that they would profit big time in a few years, by flipping in a resale, and moving up. The banks created phoney mortage backed securities CDO's. Real estate became a speculative game that collapsed in on itself.

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